The helix-loop-helix (HLH) family of transcriptional regulatory proteins are key regulators in numerous developmental processes. The class I HLH proteins, such as E12 are ubiquitously expressed. Class II HLH proteins, such as MyoD, Atonal, NeuroD/BETA 2 are expressed in a tissue-specific manner. Class I and II heterodimers can by binding to E-boxes (CANNTG) regulate lineage commitments of embryonic cells. In an attempt to identify partners for the E12 protein that may exert control during liver development, we performed the yeast two-hybrid screen using expression complementary DNA library from human fetal liver. A novel dominant inhibitory HLH factor, designated HHM (Human Homologue of Maid), was isolated and characterized. HHM is structurally related to the Id family and was highly expressed in brain, pituitary gland, lung, heart, placenta, fetal liver, and bone marrow. HHM physically interacted with E12 in vitro and in mammalian cells. Comparison of the dominant inhibitory effects of HHM and Id2 on the binding of E12/MyoD dimer to an E-box element revealed a weaker inhibition by HHM. The HHM was transiently expressed during stem cell driven regeneration of the liver at the stage where the early basophilic foci of hepatocytes started to appear. The fact that the HHM transcripts were almost exclusively located over the basophilic foci suggest that the HHM molecule might be involved in regulation of liver-specific gene expression. Although some similarities exist between the expression profiles of HHM and Id2 there are distinct differences best seen in fetal tissues. Based on the expression profiles of HHM in both fetal and adult organs we suggest that HHM might participate in morphogenesis and organogenesis in the developing embryo.